Start-up Visa Canadian Case Law Summary

Appendix (a)
CASE SUMMARIES

Yang v. Canada (Citizenship and Immigration), 2019 FC 130
Facts
Liangshuang Yang along with four other applicants all submitted permanent resident status applications for the SUB class. The peer review concluded that the outline of the competitive marketplace was weak and high-level. Revenues were clearly projected but not rooted in any rational expectation of the market. There was only a tertiary overview of marketing and distribution strategy. There appeared to be no intellectual property brought to the project. The business case appeared frivolous without sufficient supporting documentation or evidence to warrant a typical venture capital investment. The entity had a management team with limited to no start-up experience. After a Procedural Fairness Letter by the officer, they got denied on their permanent resident status application providing reasons that in some cases referred to insufficiencies in the provision of information. Some critical missed information is; A) The Applicants are not listed as “essential”
B) The Canada Revenue Agency documents only list one owner/partner/director for the projects , who is not one of the Applicants

Issues
Did the Officer committed a reviewable error by ignoring evidence within the original Permanent Resident application and supporting documents, and basing the decision on erroneous findings of fact made in a perverse or capricious manner or without regard to the material before it?

Holding
The Applicants failed to meet their onus of providing sufficient evidence to support their applications. While these issues are not raised in the PFL, the Officer’s procedural fairness duty is lower when reviewing a visa application and no duty arises where the Officer has concerns regarding the deficiency in the application or supporting documents.

The Applicants do not address the missing information from the Commitment Certificate but rather pull information from a business proposal. This is not sufficient to show a reviewable error as the Officer questioned the Commitment Certificate, not the business proposal.

The Court concedes that the Officer may have erred in relying upon the Applicants not being listed as “essential” in the commitment form, as they had received confirmation that there is no requirement that the designated entity name any essential applicants. This advice appears to deprive the particular item of any utility. In addition, there does not appear to be a warning that the form be answered truthfully, which would put aside any issue as to how the “essential”question should be answered.

Even if the Officer’s decision was affected by the confusion over the Applicants designating themselves as non-essential, it is insufficient as a ground to overcome the remaining evidence

supporting the Officer’s grounds and other insufficiency evidence in the decision making process to refuse the applications. Accordingly, the Officer’s decision was a reasonable.

Rationale
Considering the results, the court established that an error by the Officer cannot be considered as grounds to the case being reviewed. In the findings, it can be seen that it is crucial for a commitment letter to indicate the “essential” applicant. Yet, the applicants failed to provide the required information; and based on The Ministerial Instructions Respecting the SUB class 2(5) and Subsections 11(1) and 14.1(1) of IRPA, the application for judicial review was dismissed.

Sapojnikov v. Canada (Immigration, Refugees and Citizenship), 2017 FC 964
Facts
A Visa Officer concluded that Mr. Sapojnikov had entered into a business incubation program with the Toronto Business Development Centre primarily for the purpose of acquiring status in Canada, and not for the purpose of engaging in business activities.

Mr. Sapojnikov asserts that the decision was arrived at in a procedurally unfair manner. He submits that the Officer made negative credibility findings based upon concerns with respect to his immigration history, without him being afforded the opportunity to address the Officer’s concerns. Mr. Sapojnikov further submits that the Visa Officer’s finding that his application was primarily motivated by a desire to obtain status in Canada was influenced by a poison pen letter that was never disclosed to him. Finally, Mr. Sapojnikov argues that the Officer took irrelevant considerations into account in rejecting his application.

The GCMS notes that Mr. Sapojnikov’s immigration history played a significant role in the decision to refuse his application for permanent residence. Mr. Sapojnikov’s had previously applied for refugee status in Canada and got denied less than four years before the date of his Start-up application.

Issues
The determinative issue in then instant case is procedural fairness. Did the process followed by the decision-maker satisfied the level of fairness required in all of the circumstance?

Holding
the failure of the CPC-O to disclose the poison pen letter to Mr. Sapojnikov before refusing his application for permanent residence is a breach of procedural fairness. The Court also recognizes that the level of procedural fairness owed to visa applicants is at the lower end of the spectrum. However, Mr. Sapojnikov was undoubtedly aware of the details of his immigration history, he was not aware of the Officer’s finding that he allegedly worked illegally in Canada and that he had allegedly circumvented Canadian immigration rules. Consequently, Mr. Sapojnikov had no opportunity to challenge the findings cited above. This constitutes a further breach of procedural fairness in this case. Consequently, the application for judicial review is allowed, and the matter is remitted to a different Visa Officer for re- determination.

Rationale
If an officer based their decision on a material received from an individual other than the applicant, then the material should be disclosed by the Officer, and the applicant is entitled to be given the opportunity to address those concerns. For this reason, a procedural fairness test has been established in Qureshi v. Canada (Citizenship and Immigration), 2009 FC 1081. The court also pointed to the Sadykbaeva v. Canada (Citizenship and Immigration), 2008 FC 1018.

Mourato Lopes v. Canada (Citizenship and Immigration), 2019 FC 564
Facts
Ms. Mourato Lopes applied for a permanent resident visa as a member of the Start-Up Business Class. The Officer determined that she was participating in the arrangement primarily for the purpose of acquiring a status or privilege under the Immigration and Refugee Protection Act, SC 2001, c 27, and not for the purpose of engaging in the business activity. The applicant submits that this decision breached procedural fairness and is unreasonable, for the reason that (i) it failed to acknowledge her adherence to a program operated by a designated institution (Empowered), and (ii) it was internally inconsistent with and ignored evidence of her intention to pursue her business venture.

The application for permanent residence required Ms. Mourato Lopes to provide documentation to demonstrate her progress. The Officer’s concerns on insufficiency in evidence were connected directly to her statements on her essential role in the company. The Officer requested that she provide objective evidence of her successes relating to her stated roles. This evidence was not provided.

Issues
Does the decision-maker need to comment on every piece of evidence? And whether the Officer is bound by the decision of the peer review?

Holding
It was appropriate for the Officer to focus on her progress, or lack thereof, during the time period she was lawfully authorized to work. Her submission ignores the fact that her inability to work after December 2018, in Canada was of her own making. She chose to leave Canada to vacation when, had she remained here, she could have maintained her status as a worker as is provided for in paragraph 186(u) of the Immigration and Refugee Protection Regulations, SOR/ 2002-227.

The decision under review does not appear to rely on the peer review assessment at all. The Officer writes: ““I did not convey concerns in relation to the peer review to the applicant in my PFL because the results of the peer review did not affect my assessment.”” Indeed, the Officer correctly noted, contrary to the peer review, that the business was incorporated.

It was held that the Minister is responsible for maintaining the integrity of the program, not the designated entity (incubator). Any questions raised by the Applicant that Empower did not notify her on the progress of the venture therefore is irrelevant.

A decision-maker does not need to comment on every piece of evidence, only those which clearly point to the opposite conclusion. While the Officer did not have to look outside the period, she did, but there was nothing which pointed the opposite way for the Officer to consider. The court found nothing unreasonable in the Officer focusing on Ms. Mourato Lopes’ efforts in the period she was actually entitled to work in Canada.

Rationale
Per Kwan v Canada; A case involving a refusal for a permanent resident visa as a member of the Start-Up Business Class, that in the absence of evidence that the concerns raised in the peer review were a factor in the decision, there is no requirement to bring it to an applicant’s attention.

Nguyen v. Canada (Immigration, Refugees and Citizenship), 2019 FC 439
Facts
Empowered Startups Ltd. a designated business incubator pursuant to the Ministerial Instructions, accepted the Applicant’s venture for incubation and signed a Start-up Business Class Commitment Certificate. In December 2017, the Officer requested that the Applicant’s Commitment be independently assessed by a peer review panel.

About two months later, the Panel found that there had been an insufficient level of due diligence performed by Empowered when accepting the Applicant’s business proposal for incubation. In particular, it noted that it was unclear if the Applicant had validated her idea in Vietnam or not, that having staff develop a Natural Language Processing solution in a language they do not speak was problematic, and that it was not normal for the Applicant to have invested over $300,000 without having validated her business solution. Later on a PFL was issued to the Applicant by the Officer.
Shortly after, counsel for the Applicant at the time filed an access to information request to obtain a copy of the peer review report and an extension of time to file submissions in response to the Procedural Fairness Letter. Before receiving a reply to the access to information request, counsel for the Applicant at the time filed reply submissions to the Procedural Fairness Letter stating that they have not obtained the information regarding the peer review and they were unable to determine how the Panel came to its conclusions.

In two months period the application was denied by the Officer.

Issues
A. Was there a breach of procedural fairness, either by the Panel or the Officer?
B. Was the Officer’s decision reasonable?

Holding
The court held that the Officer committed a fatal error by relying on extrinsic evidence with which the Applicant was never confronted. This breached the Applicant’s procedural rights and, and such, the decision must be quashed. It will not be necessary, as a result, to consider the other arguments raised by the Applicant against the Officer’s decision. The Application for Judicial Review will therefore be granted. The decision of the Officer, dated July 20, 2018, dismissing the Applicant’s application for permanent residence as a member of the start-up business class is remitted to a different visa officer for reconsideration.

Rationale
An applicant should be afforded a chance to reply to or comment upon the Officer’s concerns over the peer review stage.

Bui v. Canada (Immigration, Refugees and Citizenship), 2019 FC 440
Facts
In December 2017, the Officer sought to determine whether due diligence was completed by Empowered when accepting the Applicant’s business proposal and therefore requested that the Commitment be independently assessed by a peer review panel.

After a peer review process, in a PFL dated March 22, 2018, the Officer alerted the Applicant of the Panel’s concerns regarding the lack of due diligence. Several other issues were raised regarding whether the Applicant had participated in the Commitment with Empowered primarily to acquire permanent residence in Canada rather than to engage in a business activity for which the Commitment was intended:

The Global Case Management System [GCMS] notes indicate that the Officer acknowledged that the Applicant filed his reply to the Procedural Fairness Letter despite the pending access to information request. The Officer noted that the Applicant provided appropriate incorporation documents, but failed to provide any documentary evidence that spoke to the business environment in communist Vietnam and observed that the company’s website was only in Vietnamese and that the phone number listed was 123-456-7890.

The Applicant raises concern that he intended to be taking part in the peer review session along with its’ incubator. He then submits that the peer review report was deficient, which, in turn, jeopardized the Officer’s evaluation of the proposed venture and the Applicant’s credibility, akin to the role of a “poison pen letter” such as in Sapojnikov v Canada.

Issues
The question is whether the notice by the Officer was sufficient enough for the Applicant to be reasonably informed of the case to meet?

Holding
The peer review was taken to examine if Empowered had conducted due diligence in accepting the Applicant’s business proposal, and does not focus on the conduct of the Applicant. Because the Applicant did not file evidence substantiating his procedural concerns to the Officer, the Officer correctly concluded that these allegations were insufficient, and, in any case, that they were the ultimate decision-maker. The Applicant’s reply was also insufficient to allay the Officer’s substantive concerns. By opting not to wait for the access to information request, the Applicant, who, by his own admission, was not in a position to address the Officer’s concerns related to the peer review without first seeing the Panel’s report, consciously limited his own ability to reply to these concerns. On a final note, the Applicant’s reliance on Sapojnikov, equating the poison pen letter in that case to, as he characterizes it, a deficient peer review report, can be distinguished on the facts.

Rationale
As the Officer’s concerns arose from a requirement under the Ministerial Instructions, namely that an applicant must not enter into a commitment for the purpose of obtaining a status or privilege under the Act (Ministerial Instructions s 2(5)), one could argue that the Officer was not obliged to put this to the Applicant. However, in the present case, the Officer did raise this concern with the Applicant. It is clear from the record that the Applicant did not sufficiently alleviate the Officer’s concerns outlined in the Procedural Fairness Letter regarding the purpose for which the Commitment with Empowered was made.

Kwan v. Canada (Immigration, Refugees and Citizenship), 2019 FC 92
Facts
In Ms. Kwan’s case, an agreement was reached with a designated business incubator based in Vancouver, namely Empowered. The agreement described the proposed joint venture as a fee based “one stop information platform (Financial Website)” linking Chinese investors with institutions offering Canadian financial products. This concern led the officer to ask the Canadian Association of Business Incubation for a peer review of the proposed business model. CABI’s peer review report dated February 16, 2018 identified problems with the proposal and noted that the business model had “changed significantly since the initial application was submitted”. The report also stated that Ms. Kwan “has committed to paying $300,000 for a year of incubation services. This is not normal for an incubator in Canada”.On February 28, 2018, Ms. Kwan was asked to provide a status update on the establishment and operation of her business. Ms. Kwan then provided a three page “Venture Update” describing a new business model.

Ms. Kwan’s update gave rise to a new concern about “lack of seriousness”.

Ms. Kwan’s point that the Visa Officer harboured an initial concern about Empowered’s business model and its motives. It is also apparent that Ms. Kwan was not told about the issue.

Issues
Did the Visa Officer’s concern about Empowered, impaired his judgment on the case?

Holding
Ms. Kwan’s argument that she should have been informed about this concern is, however, wholly undermined by the fact that there is nothing in the Visa Officer’s decision indicating that Empowered’s conduct was ultimately taken into account in the rejection of Ms. Kwan’s application. The stated basis for the decision was Ms. Kwan’s lack of meaningful operational involvement with the start-up and that was, on its own, a reasonable justification for the decision. On this record, there is simply no basis to conclude that the Visa Officer harboured some disguised motive for the decision. Indeed, if an inference is to be drawn it would be that Ms. Kwan’s explanation for Empowered’s assistance to a similar venture was accepted and the Visa Officer’s conflict of interest concern was dispelled.

In this case, the Visa Officer’s tentative reservations about Empowered had no relevance to the assessment of Ms. Kwan’s motives or her credibility. In fact, CABI’s reference to Ms. Kwan’s $300,000 commitment to Empowered was, not surprisingly, never taken up by the Visa Officer as a point of subsequent interest.

Rationale
The main reason that the review was dismissed is the fact that the Applicant did not intended to fulfill their obligation to conduct business. Even if a fact might come up to the Officer’s attention, if it does not render the process of decision-making it is irrelevant.